Board contact before loan finalized?

The usual process to get a board interview is you complete the board package, which customarily requires among other things, the loan commitment letter.

Your broker is wrong- you don't sign final loan docs until closing date, and boards don't require banks to be ready to go to evaluate your package. The Board approval timeline and the process to get the bank to the finish line (appraisal, verifying everything on your app) happen in parallel. If boards required banks to be "clear to close" before evaluating, tons of people would lose their rate locks while they twiddle their thumbs.

You normally do need a commitment letter and not just a pre-approval letter for a board interview.

Small buildings are different, though. The board may be willing to talk to you prior to your formal board interview, especially given the situation you've outlined over multiple threads about a building illiquidity issue.

It's in the board's best interest to have the unit you're buying sell for the highest possible price. It is more likely to achieve that goal by talking to you than by having your offer fall through, forcing the seller to market the property to a more narrow group of buyers (i.e., cash buyers or those willing to consider portfolio lenders) than they initially thought.

Worth a try, I'd say.

Oh man, I hope it is not bad manners to post so much about my problems! I am just having so little assistance from our lawyer or broker.

We do have a firm commitment letter but not a finalized loan. I've told the broker to submit the coop package with the commitment letter and that we won' wait until our loan is cleared. At this point, I am not even that interested int he apartment anymore but my husband still wants to go ahead.

Thank you so much, Lad and Crescent!!

Please see my last comment in your other thread.

I bought a coop recently and went through the interview with a loan commitment only. The bank calls the shots on the closing date. They check the finances of the buyer as of a week before the closing. If everything is okay, they give their okay to have the closing. If something has changed so that the finances are not within their guidelines, that's another story. In the worst case scenario, they can withdraw the mortgage commitment. With the banking crisis, mortgages are scrutinized very carefully.

The "usual" process is: Loan Commitment Letter > Board Package Submitted (though, oddly, I have seen buildings that will take a package without an LCL) > Package Reviewed by Managing Agent > Package Reviewed by Board > Applicant Invited to Interview with Board > Board Approval, if Granted > Applicant Clears the Last of the Conditions from the LCL > Attys Schedule Closing > Closing.

HOWEVER, this is all from the POV of a real estate broker. This is simply my experience of how it "traditonally" works.

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I am NOT an attorney, and I am not offering legal advice. That said, meeting with the board without being invited to an interview is really an unusual strategy, and I wouldn't attempt it without clearing it with your attorney first.

Also consider: certainly if I were a board member, and a potential applicant began to explain to me the "weaknesses" of my building, I would consider that conduct... rude at best. Remember that these people are also investors in this corporation, and additionally are giving up their free time to consider potential shareholders. Lad is right that small buildings can operate differently, but it does sound like you're pushing for a turndown.

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What's wrong with that?

Do realize that if your behavior is at all out of the ordinary -- which to my mind includes an unusual meeting with the board or even a scheduled meeting with the board where the applicant is confrontational --- and if you're turned down, the seller has a pretty good claim to say that you met all the other contract conditions, then threw the interview, and he/she has a right to keep your deposit.

It sounds like you want out of this deal, but keep in mind that that exit, if mishandled, might cost your your escrow money. Again, talk to your attorney before you do ANYTHING.

ali r.
{downtown broker}

Now we can't ungray front porch - another valued poster gone completeliy to gray!!!

Just an add on. Coops will require (a) complete purchase application with all itemized document requests, (b) conditional loan committment from lender and (c) 3-sets of original aztec recognition agreements. Items (b) and (c) are bank docs sent over once underwriting provides that conditional approval. There still may be some conditions listed to close, but those are typically finalized after the coop approval comes in. After board approval, the bank's 'clear to close' is one of the last things to happen prior to setting up your actual closing date.

Ali's timeline is correct from brokers' point of view.

With that said, I dont know what ur atty or broker is advising you here? Once the condition loan committment + aztecs arrive, that package should already be complete and ready to turn into mgmt immediately. The contract itself might have verbiage saying the package must be handed in within X days of receipt of conditional loan commitment letter. Usually 5 days, but as Ali said us brokers are not atts so ask ur atty this question.

As for your last question, mgmt should shed color on what is causing ur bldg to be declined by major lenders. When problems like this arise usually the corporation or condo will take steps to reverse the negative issues or provide the lender with updated docs to get back on their "approved" list.

Ali, I agree that it would be rude if a potential applicant began to explain the "weaknesses" of the building. I wouldn't consider it rude, though, for an applicant to ask a small, self-managed building open-ended questions like:

"I see that the building has $5k in reserves. Can you tell me more about your plans for reserve levels?"

"I learned that Big Bank Lender X and Big Bank Lender Y will not finance in the building due to [reason]. Have you encountered this previously?" That might be enough to get you what you need, depending on how talkative the person is. If not, perhaps a follow-up question like "Do you have plans to make the building more attractive to Big Bank lenders?"

I think there are ways you can ask the question artfully to get the information you need without seeming too rude or pushy.

we received and sent the commitment letter with our board package and decided to just deal with the lack of financial approval after we purchased, since it didn't seem like we would have any answers and didn't want to screw up our interview.
However, the board declined us anyway. I wonder if this is because no one ever told then why our loan was taking so long ( they have only had cash buyers there for quite a while). I was really concerned that none of the brokers or sellers were conveying this info to the coop board and now I think I was right to be concerned and it lead to our rejection?